In 1950, a nun who was a history and geography teacher in Calcutta was called on to help the poor and to live among them. Instead of just talking about caring for the poor, she chose to say very little and helped the poor with her actions, not just her words.
Because of this, when she did speak, people listened.
She had this to say about the difference between words and actions: “There should be less talk. A preaching point is not a meeting point. There should be more action on your part.”
Games as meeting points
When I was deciding how I wanted to teach financial education and the investment skills my rich dad taught me, I made a conscious choice to incorporate games into my methods. I did this because games require more action than a lecture. As Mother Teresa said, “A preaching point is not a meeting point.” Our games are meeting points.
Games provide a social interaction for learning and helping someone else learn. When it comes to investing, there are too many people trying to teach by preaching. We all know that there are certain things that are not best learned by simply reading and listening. Some things require action to be learned, and games provide this elementary action step to learning.
Confucius once said: “I hear and I forget. I see and I remember. I do and I understand.”
My purpose in going beyond just writing books about money and investing, and creating games as learning tools, is to create more understanding. The more understanding people have, the more they can see the other side of the coin. Instead of seeing fear and doubt, the players begin to see opportunities they never saw before because their understanding increases each time they play the game.
There are many stories of people who have played our games and have had their lives suddenly changed. They have gained a new understanding about money and investing, an understanding that pushed out some old thoughts and gave them new possibilities for their lives.
A world of opportunity More »
Whether your expenses are piling up or you simply lack the financial discipline to sock away a few extra bucks every month, there are myriad reasons why it’s difficult to amount a sizable savings account.
Here’s the problem: Once you get paid, your money has to go several places at once. Bills need to be paid, credit card balances need to be settled, groceries need to be bought, perhaps even some nonessentials, too — and, in all the shuffle, the money that you should be saving becomes your discretionary income, and what should be your disposable money, you dispose of. Zero savings there.
You’re not going to break this cycle until you start treating your own savings account like a bill that needs to be paid monthly, along with your rent, car payment and utilities. You need to learn to pay yourself first.
This means that each time you get your paycheck, the first thing you do is set aside a portion of your earnings to save before taking care of your bills and other necessities. It guarantees that the money you should be saving, you’re actually saving. But a “savings-first” plan requires you to budget your money.
Saving, Bills, Fun: In That Order
As personal finance blogger J.D. Roth noted on his site Get Rich Slowly, “Most people spend their money in the following order: bills, fun, saving.” Developing the best pay-yourself-first plan should allow you to save some money and still afford your bills and responsibilities — neither obligation should suffer. So how much should you save?
In an interview with CBS News, financial expert David Bach said that people should save one hour’s worth of income every day (that’s 12.5 percent of your gross pay). Most people only save 4 percent of their income — just about 20 minutes of work. The trick is to start slow.
Here’s How to Start Saving Your Income
WASHINGTON (AP) — Rosemary Anderson could be 81 by the time she pays off her student loans. After struggling with divorce, health problems and an underwater home mortgage, the 57-year-old anticipates there could come a day when her Social Security benefits will be docked to make the payments.
Like Anderson, a growing percentage of aging Americans struggle to pay back their student debt. Tens of thousands of them even see their Social Security benefits garnished when they cannot do so.
Among Americans ages 65 to 74, 4 percent in 2010 carried federal student loan debt, up from 1 percent six years earlier, according to a Government Accountability Office report released Wednesday at a Senate Aging Committee hearing. For all seniors, the collective amount of student loan debt grew from about $2.8 billion in 2005 to about $18.2 billion last year.
Student debt for all ages totals $1 trillion.
“Some may think of student loan debt as just a young person’s problem,” said Sen. Bill Nelson, D-Fla., chairman of the committee. “Well, as it turns out, that’s increasingly not the case.”
Anderson, of Watsonville, California, amassed $64,000 in student loans, beginning in her 30s, as she worked toward her undergraduate and graduate degrees. She said she has worked multiple jobs — she’s now at the University of California, Santa Cruz — to pay off credit card debt and has renegotiated terms of her home mortgage, but hasn’t been able to make a student loan payment in eight years. The amount she now owes has ballooned to $126,000.
Usually, for most of us having an EPF or a separate PPF account is more or less our action plan for our retirement. In a world where our everyday lives have evolved from that of our parent’s, these kind of savings have now become very outdated. For the upcoming retiring generation solely retiring on EPF is often looked at as lack of pension after retirement. If one does not accumulate enough wealth for their retirement, there are chances that one won’t be able to sustain themselves post retirement, solely with the interest from income saved.
According to surveys, more than 75% of households in developed countries like United States are investing mutual funds for post-retirement income. So, why are Indian hesitant about such an investment? Let’s see how mutual funds can help you plan your retirement smartly.
1. While investing for retirement, make sure that you have a reasonable amount of exposure to equities in the initial years of investment, and slowly move them to debt funds or other conventional saving options such as deposits or tax-free bonds. This process of shifting can start even 5 years before 5 years of your retirement, if you have been investing for around 15-20 years. Also, for an investment for as much as 15 years or over, the chances of getting negative returns from the stock market are next to nothing. So, your money stays safe and also equity usually gives inflation-beating returns.
2. Try to rebalance your fund portfolio each year. This means that you should move around the proportion of debt, equity & gold in your portfolio regularly. A diverse kitty gives much need exposure to different kinds of asset categories like EPF, PPF, and other debt options and of course mutual fund.
3. If you have mutual funds post retirement, don’t depend on them entirely for dividends, for monthly income. Incorporate the Systematic Withdrawal Plan (SWP) to create your very own annuity plan. These are a very tax-efficient option, if debt funds are held for over a year.
4. The mutual fund portfolio for your retirement plan can survive without a fancied sector or a particular theme. If you as an investor, do wish for such an exposure, you should limit the same to 10% and should make sure to exit of such theme a few years before your retirement.
Following the above pointers can definitely help you in planning your retirement fund basket without a burning a hole in your pocket.
Author Bio: Harsimran Tikka, a blogger & literature fanatic. Loves doing analysis on any new financial product that comes into market and provides her views. She has written several articles focusing on mutual funds.
Getting started in paper assets is very easy. Anyone today can go online and buy or sell a share of stock. Deciding what and when to buy and sell is where it gets tricky.
Stocks are only one form of hundreds of the paper assets available today. There is a term you may have heard of: derivatives. It’s a fancy word that is used often. What does it mean?
The root word of derivative is derive, which means, “to come from something.” Think of orange juice:
- You slice an orange.
- You squeeze the juice out of the orange into a glass.
- The juice is a derivative of the orange.
A share of stock is a derivative of the company that issues it. A stock option, such as a put or a call, is a derivative of a stock.
A quick word on brokers
It’s obvious that I am a huge proponent of women getting financially educated, myself included. When I first delved into paper assets years ago, I knew nothing about the stock market.
So, I did what, at the time, seemed like the smart thing to do. I found a stockbroker. His name was Mark. I told Mark, “I have a little money to invest in stocks. What do you recommend?”
He said, “You can’t go wrong with Coca-Cola. It’s been on the upswing for the past three months.”
In the past, stock tips were often shared via brother-in-laws, in the elevator or next to the water cooler. Person “A” would share their amazing stock tip and how they have been killing it with this particular investment or that they have heard that this stock is about to take off. Person “B” would anxiously listen and then perhaps go out and have their broker buy shares in that company.
While this level of amateur advice might be laughed at by some today, many of those same people get excited when they see a stock tip on the Internet. Chat rooms, Twitter and blogs have become today’s new water cooler; and somehow, because individuals see stock tips on the Internet, they give the tip a higher level of credibility. They might have rolled their eyes at their brother-in-law; but if they stumbled across their brother-in-law’s blog, they’d promptly invest in his suggestions!
Why People are Interested in Stock Tips
Most people have very little expertise in the stock market and investments, yet most people are interested in making money. Thus, people are always looking for someone who can bridge the gap between their lack of knowledge and their desire to make more money.
Historically, the way most people addressed this gap was to hire/pay a professional to invest their money for them. Today, more and more people are becoming disillusioned with the professional investing community and are looking to make their own investment decisions.